I think you missed the context since it was not quoted. It was in response to full pay-off.There seems to be a theme to your posts on this subject.I already included 10k salt which is the max limit by law. Please check carefully.You are assuming no charitable contributions and also no state income tax.That is not correct. 690k at 6.75 is about 47k + 10k salt - 29k standard deduction will make it 28k. Only 28k is itemized. 400k HHI is 24% federal.
5%, possibly less.
Hence, tax saving is 28k * 0.24 = 6.7k . Which makes effective rate to be 5.7%.
OP, didn't say anything about charitable contributions and if there is any it will be small benefit at 24% tax rate. I don't expect the rate to go below 5%.
How did you calculate 5% or less?
In this case the itemized deductions are well over the standard deduction. So the rate of the mortgage will be around 5.0%, give or take, until a substantial amount is paid off at which point the rate goes back to the full rate.
I think OP could go either way here. Taking some gains and offestting with some losses to lower mortgage balance in this case seems like a reasonable thing to do. But it isn’t an emergency either way.
Also, my recommendation was same please see my first post in this thread.I'd pay it off.
It's a guaranteed 6.75% return.
Statistics: Posted by babystep — Mon May 27, 2024 1:32 am — Replies 19 — Views 1284